Here is a quote from Mr. Tooley (thanks EconTalk for the transcript) to start you off:

I was in Hyderabad in South Central India. I was there doing consultancy work for the International Finance Corporation, the private arm of the World Bank. I was looking at elite private education, private education for the middle classes and the rich, because I’d become an expert in private education–that was my area of research. I was dissatisfied with this because for whatever reason, I was drawn to serving the poor. That’s what I felt my life should be about. And here I was looking at private education for the rich.

So, on a day off from my consultancy, I wandered down into the slums of the Old City; and sure enough–I had a hunch about what I might find, and I found a private school. A school, charging in those days what would be the equivalent of $1 U.S. dollar per month, serving a hundred children. I met these people; and then I wandered down another alleyway and found another school. And soon I was in contact with a federation of 500 of these low-cost private schools in these poor, largely Muslim areas of the old city of Hyderabad.

It was an amazing finding for me, because suddenly the two parts of my life came together. I could work concerning the poor, low income families and I could be exploring private education, too. But more than that, this seemed very exciting. Poor people were using private schools. Why? Why has no one told me about this? What’s going on here. And so I began a really exciting time in my life.

I ran across this article today – don’t you love seeing people solving problems, creating new models and causing upheaval? Kiva.org,Indigogo, Grameen America… These are some of the ones that come to my mind. (And all of these are individual people, groups, getting together voluntarily, whether they are non-profits, for profits. Government solutions would take years and would be bureaucratic before they even started. It’s the voluntary sector, the ‘freer’ market that allow problems to be solved ultimately. More pressure to replace what no longer works!)

Here’s a quote from the Forbes piece:

“No banks want to give a company like mine a loan – we’ve got great growth rates but profitability’s not there yet,” he says. “They have a box and we don’t fit into it.”

In fact, big banks approved less than a fifth of all requests for small-business loans they received in January. Small banks approved about half of applicants, according to a survey by Biz2Credit, an online platform that matches businesses and lenders.

“The more you give the watchmen to do, the more tempting it becomes to corrupt them, and for them to let themselves be corrupted.” from recent Reason article by Tucille: What Do I Know About Corrupt Cops? My Family Owned a Few.”

And I think I’ll tune in for the upcoming Al Jazeera America piece on the militarization of our police in the US. When I was growing up (in a smaller, relatively peaceful town), I perceived the police as being there to ‘serve and protect.’ But now I’m very aware that they can pretty much find a reason to arrest whomever they want, and they treat every encounter with a ‘citizen’ as a threatening one. Either there’s been a shift in the past 30 years or I’m just older and more cynical and more aware…

Better than government options – private organizations can adapt, change and improve much more easily. If your organization messes up or is wasteful, someone else can compete with you and do it better. for government organizations – if you are wasteful or mess up, odds are there will be an investigation and then you’ll get MORE money and influence (think FEMA, think HHS, think Education, list goes on and on).

Better than non profits, perhaps? A for profit model gives you a sustainable income stream (often better than doing grant proposals, competing for donors in tough times). The modern publicly listed company is an artificial construct and most folks have forgotten the free market is capable of infinite other models. The social enterprise movement is a fantastic new approach. The idea that ‘for profit’ companies means your somehow compromised and unable to change the world is antiquated and false. And the idea that maximizing shareholder value = money, well, why? Social Enterprises are voluntary associations – no one’s forcing people to buy shares, the profit goals are written into bylaws… More power to them.

Bye Mom, off to school!

Here’s one I like: Kunskapsskolan – a private school “social” enterprise – aim for 10% profit each year, give 90% of revenues to school principals to manage. They have only gone into blue collar areas because, as the CEO says, they’re not catering to the rich. They want to improve school for the average child since public schooling is failing. Sweden overall isn’t a perfect model for education, but this social enterprise looks very promising.

A kid hears about the shop. He comes to the shop because he’s been told he can learn how to fix bikes. As he learns how to fix bikes he also learns how to work hard along side other people while earning a bike of his own. Through the shop, he realizes that hard work pays off. This leads to him seeing opportunities in his neighborhood where he is able to leverage his skills to earn money. As his skills grow, he gains confidence and improves his ability to shape his future.

It started with one couple helping one neighbor child fix his bike, and grew from there. Isn’t this a fantastic story about two people over time building something that makes a lasting difference in the lives of kids nearby. Love the idea that the kids have to earn their bikes – so simple, but there is so much pride in earning something. Once you have that feeling that your actions led to something good, it sort of sticks with you

I ran across this column by Thomas Sowell today – pointing out that it isn’t true compassion to raise the minimum wage. Those who are lucky enough to keep their jobs will get paid more yes, but jobs will disappear overall. There will be a reduction in jobs available, increased unemployment as marginally valuable jobs are cut. It will put people out of work, and we should care about these people, too.

(A business owner, whether he runs a restaurant, a non-profit, a laundromat, an accountant’s office, a corporation has to respond if costs change. Increasing the hourly wage = increase in expenses. People responsible for their organization have to either bring in more money to keep the same people employed, but that’s not always possible. They’ll need to find a way to get expenses below income so they don’t go out of business. We know that many will cut out jobs to make up for the higher costs.) The biggest groups affected are of course the poorest and the youngest.

Unemployed young people lose not only the pay they could have earned but, at least equally important, the work experience that would enable them to earn higher rates of pay later on.

When I was growing up and in high school, you could get a job and earn pocket money with a paper route, part time service job, lawn mowing… I see very few options for my own children to earn money outside of us or their grandmother creating jobs for them to do around the house. I tell them there are 3 ways to earn money: 1. labor, 2. producing a product/service someone is willing to buy, or 3. selling/exchanging their assets (toys, bike, etc.)

New kind of role model: Nick D’Aloisio built an app when he was 15 and sold his startup to Yahoo at 17.

Since working for someone else (1.) is no longer an option and since (3.) is usually a dead end, my kids are looking at (2) and seeing examples of young people (like Nick D’Aloisio) who created an app or set up a YouTube channel and made their fortune or at least their future. We’re cultivating them as entrepreneurs. This is a good thing! Innovation can help counter the economic malaise, can challenge the crony capitalists…

I’m hoping that the lack of jobs and employment for our youth has a silver lining and will cause more folks to take charge of their own economic lives, and create new opportunities.